The aim of this study is to compute a composite indicator of multidimensional poverty and regional poverty lines to identify the severity of poverty and regional disparities of poverty in terms of the characteristics of and the availability of resources to the poor.  The study was based on the two data sets derived from the Consumer Finance and Socio Economic Survey (CFS) in 1996/97 and the Sri Lanka Integrated Survey (SLIS) in 1999/2000. Based on the poverty line, 22.4 per cent and 25.2 per cent of the households are identified as poor households whilst 25.8 and 25.3 per cent of the population is identified as poor, in the CFS and SLIS respectively. The lowest poverty is recorded in the estate sector and the rural poverty accounts for more than three-fourths of aggregate poverty in Sri Lanka. The study has also focused on poverty issues in Sri Lanka based on gender perspectives, age, educational attainments, employment, basic needs, etc… When considering the regional disparities of poverty the study has identified that the regional differences using the Single Consumption Based Poverty Line certainly do not provide a clear portrait of poverty differentials by regions because the basket of food consumption is different from region to region. When the regional poverty line and different poverty indices such as Headcount Index (HI), Poverty Gap Index (PDI), and Squared Poverty Gap Index (SPGI), and income inequality indices such as Gini and Atkinson are used, the portrait of the regional variations of poverty would change. The study has also identified that the districts identified as poor, according to the traditional income based indices are noticeably different from the districts identified as severely poor districts under the Composite Indicator of Multidimensional Poverty. The above findings may be useful in the formulation of policies and implementation of strategies to reduce poverty in the identified districts in Sri Lanka.

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